Female labor force participation and total fertility rates in the OECD: New evidence from panel cointegration and Granger causality testing

Purpose The purpose of this paper is to analyze the link between two different family policy dimensions – one supporting the combination of work and parenthood and one supporting stay-at-home mothers – and fertility rates between 1995 and 2011 in 33 industrialized countries. Design/methodology/approach Total fertility rates were regressed on the two policy dimensions, earner–carer support and traditional–family support, using pooled time-series analysis with country fixed effects and stepwise control for female labor force participation, unemployment rates and GDP. Findings The analyses show that earner–carer support is linked to higher fertility, while traditional–family support is not. Also, higher female labor force participation is linked to higher fertility before GDP is included. Conversely, higher unemployment is correlated with lower fertility levels. Sensitivity analyses with and without day care enrollment on a smaller set of countries show no influence of day care on the results for family policy. Originality/value The results give weight to the argument that family policies supporting the combination of work and parenthood could increase fertility in low-fertility countries, probably mediated in part by female labor force participation. Earnings-related earner–carer support incentivizes women to enter the labor force before parenthood and to return to work after time off with their newborn child, thus supporting a combination of work and parenthood.

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Female Labor Force Participation in Iran: A Structural Analysis

Review of Middle East Economics and Finance ◽

10.1515/rmeef-2014-0042 ◽

2015 ◽

Vol 11 (1) ◽

pp. 1-23 ◽

Cited By ~ 6

Author(s):

Mahdi Majbouri

Keyword(s):

Labor Force ◽

Labor Force Participation ◽

Female Labor Force Participation ◽

Married Women ◽

Labor Market Institutions ◽

Fertility Rates ◽

Market Institutions ◽

Female Labor ◽

Extensive And Intensive Margins ◽

Women's Participation

AbstractLow female labor force participation (FLFP) rate in Iran, at the time that women’s education has been rising and their fertility rates have been falling, has remained a puzzle. By estimating elasticities of participation and hours with respect to wages (the extensive and intensive margins), this paper tries to shed some light on this puzzle. Using a structural estimation and controlling for selection, it depicts that the elasticity of women’s participation in the labor force with respect to wages is quite large, especially for married women. Based on this, one may argue that women’s participation is very sensitive to wages. But this is not consistent with the stylized facts about FLFP in Iran. The plausible implication of such elasticities, however, is that non-participating women have potential wages close to the wages of those who participate. Therefore, lower potential wages cannot be the factor that strongly dissuades women from participation. Instead, anticipated factors, such as labor market institutions and preferences, could be the underlying force hindering women from participation. The low FLFP rate can be explained better in light of these findings. The implications for policy and research are discussed.

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